Rome smart grid a test in large-scale vs. small-scale deployment

The Joint Research Centre (JRC), along with ACEA -- the electricity distribution system operator in Rome, conducted a study assessing the deployment of a smart grid over the city.

The Malagrotta Project was launched in 2011, focusing on distribution and automation of the MV/LV network. It encompasses two primary substations, 76 secondary substations, 69.5 km in MV, four electricity generation plants, six users connected to the MV grid and 1,200 consumers to the LV grid. The grid was eventually spread to all of Rome, and JRC has been conducting their study for the past four years. The goal of the study was not only studying the financial impacts of a smart grid network, but also socio-economic impacts.

According to JRC, their Smart Grid Cost-Benefit Analysis can be used to assess financial and economic viability of urban smart grid systems. In the past, JRC has looked only at small pilots, but with the newest study, they looked at applying the technology to a full-scale smart grid urban project. JRC found that "the overall outlook for Rome's smart grid project turns out as positive from both the private investor's and the societal perspective."

JRC explained that the smart grid is a "building block for development of a Smart City," and will change the way power is generated and distributed. The report looked at how smart technology can help the European Union (EU) achieve their energy targets.

The report looked first at Malagrotta, a district of Rome, and then extended their researche to the entire grid of the Rome. They found that the return was larger for a large-scale smart grid deployment. A private investment in a district the size of Malagrotta saw a return of 1.23 percent, while the full deployment in Rome saw a 16.6 percent return. Return for a societal investment in Malagrotta saw a 1.25 percent return, while the same investment in Rome returned 16.67 percent.

"In both Private-investor and Societal CBAs the baseline results for the whole of Rome's grid are positive, whereas the Malagrotta project faces the typical challenges of a pilot project (including sunk costs and innovation risks) leading to generating losses of moderate size (so that IRRs, though lower than the discount rates, are positive)," the report explained.

JRC explained there were numerous factors to account for in the study, including: real financial discount rate, real social discount rate, average uncertainty in monetisation of benefits, average rate of decrease of benefits related to investments in infrastructure, average rate of decrease of benefits related to investments in software, average rate of increase OPEX, average rate of increase CAPEX, and the emission factor.

Although there were many negative aspects of the project, JRC found that the overall positive effects overrode the numerous problems they faced on the way. The researchers stressed that the end-user will be crucial to the success of a smart grid deployment -- possibly more than any other factor.

"It can concluded that ACEA's Malagrotta project clearly constitutes an extremely positive experience, one that bodes well for the deployment of Smart Grid infrastructure across EU countries and beyond," JRC said in a statement, "as well as for the general effort towards a more sustainable electricity system in Europe."

According to JRC, there are currently 459 different smart grid projects spread across 28 EU countries and each one can learn from the Malagrotta Project.